Recent Saudi Updates from Johnson & Pump Law

Upcoming Saudi Holidays, Events, Webinars, and Conferences

Public Sector and Significant Updates 

Corporate / Labor and Major Reports

  • Saudization Expansion: The Ministry of Human Resources and Social Development (MHRSD) has announced the expansion of Saudization, including to project management; procurement and sales; outlets providing services for shipping activities and freight brokerage; and outlets for decor and women’s tailoring.
  • Banking Sector Overview: For an analysis of the Saudi banking sector by BCG, see here.
  • Unemployment Decline: Saudi Arabia’s unemployment rate has declined to 8%, the lowest since 1999.
  • Iqama Fees for Domestic Labor: Authorities have stated that iqama fees for domestic labor must be paid yearly rather than quarterly. 
  • Digitization of Government Services: According to a report by the National Transformation Program (NTP), over 6,000 Saudi government services, 97% of the total, have been digitized.
     

Legal

  • Reference:
    • Al Tamimi Legal Magazine: For Al Tamimi Law’s latest magazine issue (focus is on sustainability in Saudi Arabia), see here.
  • Saudi Updates:
    • New SAMA License: The Saudi Central Bank (SAMA) is now issuing “Creative Future for Digital Brokerage” licenses to carry out finance aggregation services.
  • Saudi Analysis:
    • New Tourism Regulations: For an analysis of the recently amended Saudi Tourism Law and implementing regulations, see here.
  • Gulf Updates:
    • Bahrain Crypto Law: The Central Bank of Bahrain has introduced a new regulatory framework governing crypto assets.
       

Visas, Travel, and COVID

Business / Economy 

  • General Economic:
  • General Business:
    • U.S.-Saudi Deals: For a monthly list of business deals between the U.S. and Saudi Arabia for February 2023, see here.
  • Public Investment Fund (PIF):
    • Assets: The Public Investment Fund (PIF) now manages around $650 billion of assets, up from $150 billion in 2015.
    • VC Portfolio: The PIF’s VC arm Sanabil revealed on its website its portfolio of venture capital and private equity funds, which includes the likes of Andreessen Horowitz, Coatue, and Techstars. 
    • Private Sector Growth Initiatives: At its inaugural Private Sector Forum, the PIF announced three initiatives to boost the private sector: a Private Sector Hub, a Suppliers Development Program, and a Local Content Growth Program.
  • Finance, Insurance, VC, and Investment:
    • CMA QSB: The Capital Markets Authority (CMA) has released its Quarterly Statistical Bulletin (QSB) for Q4 2022.
    • SNB Chair Departure: The chair of Saudi National Bank (SNB) has resigned citing personal reasons after a statement surrounding Credit Suisse investments. SNB held a 10% stake in Credit Suisse and was hurt by the bank’s emergency merger with UBS.
    • Al Rajhi Sukuk: Saudi Arabia’s Al Rajhi Bank is set to raise $1 billion with five-year sustainable Islamic bonds.
    • Adam Neumann in Saudi: Former WeWork CEO Adam Neumann is exploring moving his new real estate company Flow to the Kingdom.
  • Real Estate, Construction, Infrastructure, and Megaprojects:
    • Desalinated River: The Saline Water Conversion Corporation (SWCC) is overseeing the construction of a vast underground river of desalinated water between cities.
    • Foreign Real Estate Ownership: Saudi Arabia is in the final stages of establishing a new system for foreign ownership of real estate.
    • IWTP Water Pipeline: The Saudi Water Partnership Company (SWPC) has received bids from three major developer consortiums for the Rayis-Rabigh Independent Water Transmission Pipeline (IWTP) project.
    • ROSHN Housing Project: ROSHN has announced the launch of “ALFULWA,” its fourth residential community in the Kingdom, covering an area of more than 10.8 million square metres near Al Hofuf.
    • Amaala Contracts Awarded: Red Sea Global (RSG) has awarded two major new contracts for the first phase of development at Amaala’s Triple Bay Marina Village to construction firm Saudi Arabian Baytur.
  • Industry, Utilities, Transportation, Logistics, and Non-Oil Energy:
    • New Industrial Licenses: Saudi Arabia issued 124 industrial licenses in January, with investments into new permits reaching $640 million.
    • Modon-GE Industrial Deal: The Saudi Authority for Industrial Cities and Technology Zones (MODON) has signed an agreement whereby GE factories in the Eastern Province will come under MODON supervision.
    • Ammonia Cracking Development: Aramco has signed an agreement with Linde Engineering to jointly develop a new ammonia cracking technology.
    • Nuclear Power Initiatives: For an analysis of Saudi Arabia’s exploration of nuclear power, see here.
  • Tourism, Hospitality, Culture, Sports, and Entertainment:
    • Film Financing Program: The Saudi Cultural Development Fund has launched its Film Sector Financing Program, offering financial support to local and international film companies that want to get involved in the country’s cinema industry.
  • Retail, Luxury, and E-Commerce:
    • No significant recent developments.
  • Religion:
    • Hajj Registrations: The Ministry of Hajj and Umrah has launched registrations for the Hajj, recently announcing the second registration phase for domestic pilgrims.
  • Science and Education:
    • No significant recent developments.
  • Healthcare:
  •  
  • Marburg Virus Warnings: The UAE and Saudi Arabia have issued warnings over the spread of the Marburg virus.
  • Technology and Telecom:
    • Gaming Ambitions: The Saudi government is betting $38 billion on the country’s potential to become the next hub for the video-game industry.
    • Saudi Arabia as a Tech Hub: For an analysis of how Saudi Arabia is becoming a hub for competing global technologies, see here.
  • Defense:
    • GAMI Initiatives: The General Authority for Military Industries (GAMI) has launched several initiatives to boost investment in military industries.
  • Food and Agriculture:
    • Dutch Agriculture Deal: Saudi Arabia’s Greenhouses Management and Agri Marketing Co., (AlRasheed) entered into a partnership with the Dutch company Plantlap to promote leafy crops production in the Kingdom.
  • Natural Resources, Mining, and Environment:
    • No significant recent developments.
  • Oil, Hydrocarbons, and Aramco: Oil prices most recently stood on April 4, 2023 at $85.21 pbb for Saudi oil (Arab Light) and $80.83 pbb for West Texas Intermediate (WTI).
    • Production Cuts: Saudi Arabia announced it will implement a “voluntary cut” of 500,000 b/d, or just under 5% of its output in coordination with OPEC+, immediately driving up oil prices. Goldman Sachs predicts oil prices could rise to as much as $100 per barrel.
    • Aramco Profits: Aramco announced its 2022 results, reporting record profits of $161 billion and increasing its quarterly payout to shareholders to almost $20 billion.
    • China Refinery Deals: Saudi Aramco has agreed to acquire 10% of Chinese oil refiner Rongsheng Petrochemical Co for $3.6bn in the second in a pair of deals. Meanwhile, a ground-breaking ceremony was held for a major integrated refinery and petrochemical complex developed by the Aramco JV Huajin Aramco Petrochemical Company (HAPCO).
    • China Supply Shifts: Russia overtook Saudi Arabia to be China’s top oil supplier in the first two months of 2023, according to Chinese government data.
       

Geopolitical

  • Policy Change on No-Strings Aid: The Saudi finance minister announced that Kingdom is changing the way it provides assistance to allies, shifting away from giving direct grants and deposits unconditionally.
  • Uganda Labor Agreement: Saudi Arabia and Uganda have signed a cooperation agreement to employ Ugandan domestic labor.
  • Iran Ties Restored: Saudi Arabia has reestablished formal diplomatic ties with Iran.
  • Syria Rapprochement: Saudi Arabia and Syria are nearing an agreement to restore diplomatic ties after negotiations mediated by Russia.
  • Sisi Visit: Egyptian President Al-Sisi met with Crown Prince Mohammed bin Salman Jeddah to discuss bilateral ties and regional developments.
  • Yemen:
    • Iran Arms Deal: Iran has agreed to halt covert weapons shipments to its Houthi allies in Yemen as part of a China-brokered deal to re-establish diplomatic relations with Saudi Arabia.
       

Gulf

  • Crypto Competition: For an analysis of how Bahrain, Dubai, and Abu Dhabi are competing to become the region’s crypto hub, see here.
  • UAE:
    • Travel Information (reference): For current information from the U.S. Embassy in the UAE, see here and for travel information see here.
    • New Golden Visas: The UAE will issue 100,000 golden visas to the world’s best programmers as it looks to become a global tech investment hub.
    • Dubai Transportation Upgrades: Dubai’s RTA has opened two major bridges and a tunnel as it implements a $1.4 billion program to transform transport in the city.
    • Competitiveness Ranking: The UAE ranks 18th globally and first in the MENA region in FDI competitiveness according to Kearney’s 2023 Foreign Direct Investment Confidence Index Emerging Markets (FDICI) ranking.
    • New Abu Dhabi Crown Prince: The President of the UAE issued an Emiri decree appointing Khaled bin Mohamed bin Zayed Al Nahyan as the Crown Prince of the emirate.
    • Costa Rica Free Trade Talks: The UAE and Costa Rica have agreed to start preliminary negotiations on a bilateral trade deal targeting a broad expansion of economic ties. 
    • Abu Dhabi Mega Aquarium: SeaWorld Abu Dhabi, which will contain the world’s largest aquarium, is set to open on May 23.
    • Expo Economic Benefits: Expo 2020 Dubai and its legacy are expected to contribute $42.2 billion in gross value added (GVA) to the UAE economy from 2013 to 2042, according to a report by EY.
  • Qatar:
    • Travel Information (reference): For current information from the U.S. Embassy in Qatar, see here and for travel information see here. 
    • Fitch Ratings Revision: Fitch Ratings has revised the Outlook on Qatar’s Long-Term Foreign-Currency Issuer Default Rating (IDR) to Positive from Stable and affirmed the IDR at ‘AA-‘.
  • Kuwait:
    • Travel Information (reference): For current information from the U.S. Embassy in Kuwait, see here and for travel information see here. 
    • Expat Restrictions: The Minister of the Interior has formed a committee to withdraw driving licenses from expatriates whose salary is less than 600 dinars and who do not hold a university degree.
    • Parliament Reinstated: Kuwait’s Constitutional Court has ruled that last September’s parliamentary election, in which the opposition made gains, was void and that the previous assembly must be reinstated.
  • Bahrain:
    • Travel Information (reference): For current information from the U.S. Embassy in Bahrain, see here and for travel information see here.
    •  Golden Licenses: Bahrain announced the introduction of a “golden license” that offers benefits to companies that bring large-scale investment projects to the state.
    •  Economic Growth: Bahrain’s economy grew by 4.9% in 2022, the fastest pace recorded in a decade driven by an acceleration in non-oil growth.
    •  Budget Approved: Bahrain has approved a draft of its 2023-24 state budget.
  • Oman:
    • Travel Information (reference): For current information from the U.S. Embassy in Oman, see here and for travel information see here. 
    •  S&P Ratings Boost: S&P Global Ratings has revised Oman’s outlook to positive and affirmed its ratings at ‘BB’, in light of improving fiscal performance.

Regional

  • Airport Capacity Constraints: Airports in the Middle East will need to invest $151 billion in capacity expansion as the global air passenger demand is expected to increase more than two-fold in 2040, according to the Airport Council International (ACI).
     

Miscellaneous and Interesting

  • James Olsen Interview: For a podcast interview with James Olsen by the Saudi-U.S. Trade Group discussing investment opportunities, trade relations, and the recent Boeing deal, see here.
  • Megaproject Security: For an overview of how Saudi Arabia is keeping its megaprojects secure, see here.
  • KAPSARC Phantom Oil Report: The King Abdullah Petroleum Studies and Research Center (KAPSARC) has released a brief describing the black market oil trade.
  • The Mysteries of the Mustatils: For an article describing archeological excavations of the mustatils, mysterious rock formations near Medinah, see here.

Resources:

Internations (U.S. Expat Networking): Riyadh, Jeddah, Eastern Province

Commercial Law in Saudi Arabia

Chris Johnson

Managing Attorney
Johnson & Pump